In an increasingly competitive market, measuring our marketing efforts and sales strategies is critical to understand how effective our resources are and to drive the changes needed to improve results.
In this article we explore 10 essential marketing and sales KPIs to measure the success of our customer strategies.
One of the great advantages of digital marketing over traditional marketing is that the space in which it develops and the technological tools available on the market allow the results of the work of marketing and sales teams to be measured more accurately and more easily than in the case of offline marketing.
The martech and salestech market have expanded so much that the possibilities for professionals to constantly track their marketing and sales metrics are endless. However, beyond technology, the most important thing when measuring our marketing and sales results is to determine the right KPIs.
- Download our guide with the 10 marketing and sales KPIs you should know and find out how to calculate them:
In a digital transformation framework, most of the actions we take to achieve our marketing and sales objectives happen in the digital space. Digitalization and marketing automation can cause the accumulation of a large amount of data related to our performance that, due to its abundance and diversity in terms of localization, can be difficult to read and interpret. This is why defining our marketing and sales objectives and setting KPIs is so important.
If we lose sight of what we want to achieve, we can end up analyzing our metrics without purpose.
What Is a KPI or Key Performance Indicator?
A Key Performance Indicator (KPI) is not just any performance indicator. Companies often use a large number of performance indicators to measure different aspects of their business. Of all the performance indicators, KPIs are the most important performance indicators and the ones that top management pay most attention to. They are also the indicators that support business decision making.
A KPI is not a metric either. A metric is a measurement unit and a KPI is an indicator specifically selected to optimize our strategies and actions and, ultimately, our results. However, it is very common for KPIs to be metrics. Thus, while a KPI can be a metric, all metrics are not KPIs.
In short, a marketing or sales Key Performance Indicator or KPI is an extremely important performance indicator for our data-driven marketing strategy and is directly linked to our marketing and sales business objectives.
How do we measure the success of our customer strategies and marketing campaigns?
The digital environment has multiplied the amount of data that companies accumulate about their own activity and, therefore, also the number of metrics and performance indicators used to measure performance.
In this sense, choosing the right KPIs is becoming more difficult, especially in the field of digital marketing and sales where reality can be understood from many different perspectives.
To make it a bit easier, below we list 10 marketing and sales KPIs that, in our experience, are essential to measure our customer strategies and the success of our marketing actions. However, KPIs must be linked to our business objectives and our activity. Therefore, no one better than the company's professionals will know what they want to achieve, what actions they are going to carry out to do so and what is the best way to measure their effectiveness.
10 marketing and sales KPIs you need to know
1. Click Through Rate (CTR)
It measures the ratio between the number of clicks on a CTA and the total number of people who have seen it.
A CTA or 'Call To Action' is a button or space on our website that invites the potential customer to do something.
2. Conversion Rate (CR)
It measures the number of leads that have been converted into customers.
A lead is a person who has shown interest in our service or product or in our brand, but has not yet become a customer. In Inbound Marketing, the conversion of leads into customers is done through lead scoring and lead nurturing strategies.
3. Customer Acquisition Cost (CAC)
It measures the amount of money it costs us to acquire a new customer.
4. Average Revenue Per Account / User (ARPA / ARPU)
It measures the revenue generated per customer and gives us information on which of our offers sell best.
Kale Tip: Separate your existing customers from new customers to get a deeper insight into your cross-selling and up-selling strategies.
5. Monthly Recurring Revenue (MRR)
It measures the predictable and recurring income, usually excluding one-time and variable earnings.
6. Churn Rate
It measures the number of customers we have lost over a given period of time.
An acceptable Churn Rate is considered to be between 5-7% per year.
7. Customer Lifetime Value (LTV)
It measures the average profit a customer or a group of customers will provide.
Kale Tip: The Lifetime Value can help you figure out which customer segments bring you the most value so that you can target your marketing and sales resources better.
8. Customer Lifetime Value to Customer Acquisition Cost (LTV / CAC)
It measures the value of a customer compared to its acquisition cost.
9. Customer Retention Rate (CRR)
It measures the number of customers retained over a period of time.
10. Net Promoter Score (NPS)
It measures a customer's probability of recommending our brand.
Kale Tip: NPS gives us insight on customer loyalty.
11. Return on Ad Spend (ROAS)
Return On Ad Spend (ROAS) measures the ROI of our advertising campaigns.
This KPI is used to measure the success of our advertising campaigns in monetary terms and is useful for marketing and sales managers to make better advertising investment decisions.
How to calculate marketing and sales KPIs?
Learn how to calculate all the marketing and sales KPIs mentioned in this article and discover the best tricks to achieve reliable results in our guide: